Arsenal Capital Backs New Broker-Dealer

Arsenal Capital Partners is sponsoring the formation of KGS-Alpha Capital Markets, an institutional fixed income broker-dealer, focusing on mortgage-backed, asset-backed and agency debt securities. The New York-based company begins with around $100 million in equity capital, and is being led by former Salomon Brothers/Citigroup pros Levent Kahraman and Dan Goldman.

PRESS RELEASE

Arsenal Capital Partners, a leading New York-based private equity firm, announced that it has partnered with fixed income industry veterans Levent Kahraman and Dan Goldman to launch KGS-Alpha Capital Markets LP. KGS-Alpha is a New York-based institutional fixed income broker-dealer, focusing on mortgage-backed, asset-backed, and agency debt securities.

KGS-Alpha has been formed by a team of industry veterans led by CEO Levent Kahraman and President Daniel Goldman. Mr. Kahraman’s expertise includes 15 years at Salomon Brothers/Citigroup and Barclays, where he focused on trading agency mortgage-backed securities. At Barclays, he was instrumental in advancing the firm to a top position in global agency mortgage-backed securities. Mr. Goldman brings 25 years’ experience at Salomon Brothers/Citigroup, where he was head of North American fixed income sales and co-head of US rates.

KGS-Alpha is focused on delivering mortgage-backed, asset-backed and agency debt securities trading and product structuring services to the institutional market. With an industry-leading team, a strong balance sheet funded with approximately $100 million of equity capital, and no legacy liabilities or exposures, KGS is well positioned to build long-term relationships with customers through value-driven services. KGS-Alpha has already begun executing and structuring fixed income products on behalf of its client base.

Commenting on the launch of KGS-Alpha, Mr. Kahraman said, “We are excited about the formation of KGS-Alpha and partnering with Arsenal in the mortgage-backed securities space, the largest and most liquid financial market in the world.” He said, “Today’s capital markets are primarily dominated by large banks, many of which continue to face significant challenges. We believe there is a unique opportunity to quickly become a leading provider to meet the evolving and increasingly complex needs of institutional customers.”

Mr. Kahraman added that KGS-Alpha will focus on executing transactions for its customers, not proprietary trading, emphasizing its “client first” culture. He said, “Our goal is to provide the outstanding market-making and structuring capabilities mid-tier institutional clients are seeking. In addition, we are excited about the backing by Arsenal Capital Partners and are confident that we can leverage Arsenal’s deep financial services and business-building expertise.”

KGS-Alpha was able to quickly attract the expertise necessary to serve clients. The firm has assembled a team of 25 highly skilled senior officers, traders and salespeople. Alan Weber, Chairman of KGS-Alpha, expects the firm to grow to 40 professionals by year end. Mr. Weber was formerly CEO of US Trust Co., and Chairman of Citibank International.

Carty Chock, a Partner at Arsenal Capital Partners and co-head of the firm’s Financial Services Practice, stated, “We are pleased about the formation of KGS-Alpha and partnering with such an exceptional team. Levent, Dan and their team understand the complexities of trading fixed income products, and have complementary skill sets, which include running successful and profitable trading operations as well as building powerful organizations. We look forward to helping them build an industry-leading, relationship-driven franchise and capitalize on a dislocated and fragmented market.”

KGS-Alpha Capital Markets LP is a New York-based institutional fixed income broker-dealer, focusing on mortgage-backed, asset-backed and agency debt securities. The firm provides institutional customers with financial services and embraces the importance of long-term relationships with customers and of value-driven provision of services.